One of the most important decisions to make when buying a new vehicle is which payment option will suit you best. You'll probably already have heard of the terms: Personal Contact Purchase (PCP), Personal Contract Hire (PCH) and leasing. You might however still be wondering what exactly they mean, and which is the best for you.

There's many things to consider when getting your new car, here we round up all the pros and cons you'd face when choosing to lease or buy a car.

Leasing Explained

PCH offers all the benefits of a brand-new car, without the hassle of owning the vehicle, so it's plain to see why its popularity is increasing.

PCH also alleviates the worry of depreciation associated with car ownership, as you simply return the vehicle upon termination of your contract. Leasing can often be more affordable than buying a car because you aren't paying to own the car at the end of your contract. With 29 brands to choose from, we'll ensure you not only get the best value personal contract hire, but the best choice too.

Pros and Cons of Leasing

Pros of Leasing

Cons of Leasing

You'll be able to choose from the latest vehicles

You will not own the vehicle so you can't modify it

Guaranteed protection against vehicle depreciation.

You will not have the option to purchase the vehicle at the end of the contract

You also don't have to deal with the hassle of selling your car when you want to get a new one.

If the vehicle is returned with damage then you will need to pay for it to be repaired.

Fixed monthly rental payments

You will incur extra charges if you go over the agreed annual mileage

A Maintenance package can be added to the contract

You can customise the annual mileage that suits your needs and budget

At the end of the contract you'll be able to take out a new lease on another brand-new car

Road Tax will be covered by the leasing company

Buying Explained

Whether it's through PCP, or a one lump sum payment, buying is currently the most popular choice for UK buyers.

Buying is the perfect option for those who want ownership of their car, and are happy to keep it for a longer period of time. If that sounds like you, then buying may be the best option for you.

Pros and Cons of Buying a Car

Pros of Buying a Car Under PCP

Cons of Buying a Car Under PCP

You’ll be the owner of the car (after all finance has been paid etc.)

The car’s value will depreciate quickly

You’ll be free to modify the car

All servicing, maintenance, MOTs, road tax and breakdown cover will have to be covered by you

No mileage limits in place if you purchase the car at the end

Monthly finance payments may be higher under PCP than PCH

Insurance costs will decrease

You have to pay a final payment at the end of your contract or hand the vehicle back.

The car can be used in part-exchange for a new one, or sold using our Sell Your Car service

If you don’t pay the final payment and decide to hand the car back at the end then you have to deal with most of the cos of leasing anyway.

You can put the money you get from selling your car towards buying another car.

So, would you lease or buy a car?

Deciding whether to buy or lease a car is a personal choice. With pros and cons for each, the decision comes down to personal preference and circumstances, but for most people the decision is based on whether they believe the vehicle will appreciate or depreciate in value over time.

If you'd like to find out more about how our latest leasing offers see our PCH Offers.